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What is the driving force for economic growth ahead in 2023?

The impressive growth momentum during the past year is expected to be a premise for Vietnam to achieve the growth target of 6.5% in 2023, according to economic experts.

Some of the key factors relating to this year's economic growth include exports, domestic consumption, and public investment.

These can be considered as important growth drivers of the national economy. In addition, economic restructuring, accelerating the implementation of the digital and the circular economy are also viewed as fresh impetus which will become the mainstay of the national economy over the coming years.

A growth rate 2.5 times higher than the inflation rate represents a significant bright spot in the Vietnamese economic picture from 2022. This also comes amid the world facing the highest level of inflation over the past 40 years and low growth occurring in many major economies.

Nguyen Bich Lam, former general director of the General Statistics Office (GSO) under the Ministry of Planning and Investment, assessed that the Vietnamese economic position in international trade has been consolidated and affirmed.

While global aggregate demand has recorded a decline, supply chains have been strained, with export producers facing difficulties in terms of input materials and consumption markets. Despite the export turnover seeing annual growth, it is only through the dynamism of local businesses and their sustained efforts to overcome difficulties in finding sources of goods that has allowed market expansion.

Last year saw total import-export turnover stand at US$732.5 billion, up 9.5% on-year, with this figure being a record number over recent years. Of which, exports soared by 10.6% and imports increased by 8.4%, with the trade balance of goods estimated to have run a trade surplus of US$11.2 billion.

Furthermore, foreign direct investment (FDI) into the nation can also be viewed as a bright spot for the national economy amid declining international trade and investment.

Total FDI last year hit nearly US$27.72 billion and close to US$22.4 billion was disbursed, up 13.5% over the same period from last year.

Last year's total retail sales of consumer goods and services reached VND5,679.9 trillion, representing a year-on-year increase of 19.8%, the highest over recent years.

Lam attributed the promotion of Vietnamese economic development to the efforts made by the local business community, breakthrough thinking, prompt and flexible action taken by the Government, and the National Assembly's promulgation of correct guidelines and policies.

Although the 6.5% GDP growth target for this year is lower than the growth rate of 8.02% recorded in 2022, 1% of GDP in 2023 will be equivalent to VND104.1 trillion, meaning that it is VND9.7 trillion higher than 1% of last year's GDP.

As a means of achieving this growth target, Lam said that the agro-forestry- fishery sector must increase by 3%, the industry and construction sector needs to grow by 7.6% to 8.3%, and the service sector must rise by 6.5% to 7%.

These growth rates will not easy to achieve amid the current global economic outlook, whilst major economies which are among the nation’s important trading partners are forecast to fall into recession, a factor which is likely to have a very strong impact on the Vietnamese economy.

From the perspective of economic expert Nguyen Dinh Cung, former director of the Central Institute for Economic Management (CIEM), this year it is necessary to accelerate the disbursement of public investment capital without letting the national economy lack capital.

"I believe that with the drastic direction of the Government and ministries, sector and localities, public investment disbursement will achieve positive results in 2023," Cung said.

Furthermore, Cung underscored the need to improve the business investment environment by removing obstacles for businesses and reducing costs for investors.

According to the former CIEM director, it is necessary to create trust in the market rather than criminalising civil economic relations so that financiers and parties believe that their legitimate rights and interests will be guaranteed.

Source: VOV



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